What action must a Hyper Kidz franchisee take if they do not deny the default specified by Hyper Kidz?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
- 9.2 Upon occurrence of any of the events stated in this Section 9.2, we may, without prejudice to any other rights or remedies contained in this Agreement or provided by law or equity, terminate this
Agreement. Such termination shall be effective thirty (30) days after written notice (or such other notice as may be required by applicable state law) is given by us to you of any of such events, if such defaults are not cured within such period:
- 9.2.1 If you shall use the System or Marks, or any other names, marks, systems, insignia, symbols or rights which are our property except pursuant to, and in accordance with, a valid and effective Franchise Agreement.
- 9.2.2 If you, shall have any interest, direct or indirect, in the ownership or operation of any arts and crafts business engaged in the sale of services similar to those permitted to be sold by you within the Development Area or in any business which looks like, copies or imitates the Hyper Kidz Business or operates in a manner tending to have such effect other than pursuant to a valid and effective Franchise Agreement.
- 9.2.3 If you shall fail to remit to us any payments pursuant to Section 2 when same are due.
- 9.2.4 If you shall begin work upon any Hyper Kidz Business at any site unless all the conditions stated in Section 3 hereof have been met.
- 9.2.5 If you fail to obtain our prior written approval or consent, including but not limited to site approval or site plan approval, as expressly required by this Agreement.
- 9.2.6 If you default in the performance of any other obligation under this Agreement.
- 9.2.7 If you open any Hyper Kidz Business for business before a Franchise Agreement for such Hyper Kidz Business has been fully executed.
- 9.2.8 If you fail to obtain execution of a covenant required by Section 12.8 below.
Source: Item 23 — RECEIPTS (FDD pages 52–205)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, if a franchisee receives a written notice of default from Hyper Kidz, they have thirty (30) days to correct the default to avoid termination of the franchise agreement. The notice period might vary based on applicable state laws.
Hyper Kidz can terminate the franchise agreement if the franchisee uses the Hyper Kidz system or marks without a valid agreement, has an interest in a similar arts and crafts business within the Development Area, fails to make payments as per Section 2 of the agreement, starts work on a Hyper Kidz Business site before meeting the conditions in Section 3, fails to obtain required approvals, defaults on any other obligation under the agreement, opens a Hyper Kidz Business before a franchise agreement is executed, or fails to obtain a required covenant.
This means that a Hyper Kidz franchisee must take swift action to remedy any defaults specified by Hyper Kidz within the given timeframe to maintain their franchise agreement. Failure to do so could lead to termination of the agreement, resulting in the loss of the franchise. Franchisees should carefully review the default notice and consult with legal counsel to understand their rights and obligations.